Say you have a productline which is ony being offered in one vertical and with some success. Now when you want to exapnd and want to diversify into another unrelated vertical -
1) What gotchas should I keep in mind?
2) Any examples of companies who have done so successfully?
Appreciate your help!
Your question needs more "meat". What service/product? What verticals? No details needed.
Anyways, the basic answer to the basic question is: go into it like you did the first vertical. You lathered, you rinsed, now repeat. :) Don't assume that this new vertical will be sold the same way, be processed the same way, be maintained the same way, etc.
However, as being the recipient of "the magic of cashflow" (hopefully!), some options you didn't entertain before, due to not have the resources for it, should be brought back out and reconsidered.
I lived an example as we added a healthcare vertical to our established real-estate clientele. Prospects had different needs when being sold, the services had to be tweaked to meet regulatory constraints when the real-estate market had none, our systems had to be expanded in functionality to meet different reporting needs, etc...
Don't get too thing too quickly. Having a good niche and being a prime player in that area will make it easier to sell to that vertical. If you diversify too early when there are a lot more sales to be made in your first vertical then that could be a negative. You won't look as focused from prospective buyers.
Always depends on products, some products you have to know in detail how an industry works to sell to it. Educate yourself on it, make sure there is a demand and market, see if you can compete with the other companies serving that market.
Prospect. Sell ;)